What the Rippling vs. Deel lawsuit reveals about corporate espionage in tech

It’s a story that sounds almost too outrageous to be true. Deel, a $12 billion company in the HR tech space, is facing serious allegations of corporate espionage, according to a lawsuit filed by its competitor, Rippling.

The lawsuit—filed earlier this month in a California court—claims Deel orchestrated a “multi-month campaign to steal a competitor’s business information with help from a corporate spy.” Rippling alleges that Deel planted an employee to infiltrate its operations, targeting customers in an effort to lure them away.

According to the suit, the alleged spying lasted over four months. During that time, the employee (identified in court documents only by the initials D.S.) is said to have “obsessively and systematically accessed Slack channels where he had no legitimate business interest,” conducting more than 6,000 searches.

Rippling reportedly discovered the mole after setting a trap: a honeypot Slack channel filled with fake information suggesting it contained sensitive, potentially damaging details about Deel. The channel was irrelevant to the employee’s role in payroll operations, yet he accessed it—confirming suspicions.

When confronted, the alleged spy reportedly hid in a bathroom at Rippling’s Dublin office.

“The evidence in this case is undeniable,” said Alex Spiro, legal counsel for Rippling, which is valued at $13 billion. “The highest levels of Deel’s leadership are implicated in a brazen corporate espionage scheme, and they will be held accountable.”

Deel, for its part, denies all allegations. “Weeks after Rippling is accused of violating sanctions law in Russia and seeding falsehoods about Deel, Rippling is trying to shift the narrative with these sensationalized claims,” a spokesperson said in a statement provided to the media. “We deny all legal wrongdoing and look forward to asserting our counterclaims.”

Regardless of the outcome, the case underscores a growing concern around insider threats and corporate espionage—and raises questions about how well companies protect their sensitive information.

“Insider threats are a huge problem for organizations,” says Alex Bomberg, chairman of Intelligent Protection International and an expert in security and counterespionage. “It’s really not uncommon.” He adds that while insider threats typically involve disgruntled employees taking proprietary information to new employers, the level of alleged coordination in this case is rare, but still a real risk.

The situation might have been avoidable with better internal controls, says Alan Woodward, professor of cybersecurity at the University of Surrey. “If your documents are that sensitive, why aren’t they partitioned in some way?” he asks. “If you put something in a Slack channel and anyone has access . . . they’re going to be able to see it.” Even basic file management tools like Microsoft SharePoint offer permission-based access control, he notes.

“Industrial espionage and stealing trade secrets is not exactly unknown, and recruiting somebody from another company isn’t either,” Woodward continues. But this case highlights a broader issue: Many organizations underestimate the risk posed by insider threats. “Most of a company’s assets walk out the door at 6 o’clock—because the knowledge lives in their heads,” he says.

That’s why employee satisfaction and robust internal safeguards are crucial. “A lot of hacks are done because somebody—either maliciously or inadvertently—is compromised,” Woodward says.

According to Intelligent Protection’s Bomberg, stronger internal security policies could have prevented the breach. “It’s about rule-setting, about creating a capable guardian, and making sure that one person doesn’t have access to everything,” he says. “That’s something that appears not to have happened here.”

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